VIAlytics: Cable Shifting from ‘Frequency’ to ‘Reach’ Medium

May 14, 2014

Traditionally, cable has been viewed as more a “frequency” medium than a “reach” medium, although over time that perception has changed.

The “frequency” label came about for several reasons, some more rational than others. When the ad-supported cable medium was getting underway in the very early 1980s, the first tide of sales executives came from the radio medium, which wasn’t accidental. Cable was viewed as a “hybrid radio medium” — that is, highly targeted, vertical networks that capture discreet audiences, just like radio.

There was only one problem with this underlying premise. True, cable’s original positioning was (and still is in many cases) as a highly refined targeted medium. But the cable medium is still television, which has a much more dynamic, free-flow of audiences across the channel spectrum, whereas radio’s unique listener formats (classic music, rock music, talk, etc.) tend to “wall off” their audiences to some degree.

There was one more implication – and a crucial one –to the “targeted radio” positioning of cable television. Since cable was all about discrete targets (CNN for news; ESPN for sports; TWC for the weather, etc.), advertisers deployed their cable budgets in a very concentrated fashion, often times running the same spot multiple times within the same show. That’s a really good way of enhancing frequency – not reach.

Two other reasons for the perception of cable as a “frequency” medium:

1) Most media practitioners equated small, individual cable ratings with frequency, not reach. After all, if you have a broadcast show with a 10 HH rating, the reach is 10%. But, if you want 10 HH rating points with cable, it is not inconceivable that you would need to buy as many as 20 cable programs (if not more), hence increasing the odds of duplication between the audiences of each of the 20 programs;

The reality:

It is certainly true that – at a given rating point level – a schedule comprised of numerous programs has a greater chance of audience duplication (hence lower reach) than a schedule with fewer programs. But the duplication rate between various cable shows was way over-estimated by the industry. In other words, if it takes, say, 30 cable shows to achieve 10 rating points… the reach is usually 7% or 8%, which is not that much lower than the 10% reach attained by just one 10-rated show.

2) Cable was thought of as an add-on TV campaign component. Originally, the Ted Bates ad agency created the “5% solution”, recommending that TV budgets devote at least 5% to cable. In this context, cable was added to broadcast campaigns that had already attained very high levels of reach, and it’s very hard to increase reach any further once it attains a certain level. Cable — as an add-on– hardly added any incremental reach at all. It was practically all frequency.

The reality:

In 2014, cable is no longer thought of as just an “add-on”, and in any event the argument can be turned on its head to say just the opposite! That is, cable is a reach medium, while broadcast is a frequency medium! Rather than starting with broadcast as a base, start with cable. 500 GRPs well dispersed across, say, 10 cable networks can achieve a reach of 85% within its coverage area. On top of that, throw in 500 broadcast GRPs. The total 1,000 GRPs will result in a net reach of ~96%. So, in essence, the 500 incremental broadcast GRPs added ~11 reach points, which means broadcast also added an astounding level of frequency – 45 (i.e., 500 GRPs / 11 Reach).

In the end, television is a wonderful reach medium, and that includes ad-supported cable television. And in a multi-channel environment, cable truly distinguishes itself with numerous networks that appeal to just the type of audiences that advertisers increasingly seek.